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Census Bureau Releases Annual Report on Poverty

November 19, 2010

Author: Don Friedman

On September 16, 2010, the U.S. Census Bureau released the 2009 edition of its annual publication, “Income, Poverty, and Health Insurance Coverage in the United States.” 1  In the difficult period now sometimes referred to as the “Great Recession,” the numbers are unfortunately, but not surprisingly, quite grim. This article will summarize some of the key findings in the report, and highlight a few important themes.  Among these themes:

  • The poverty data indicate that this downturn in the economy is among the worst since information has been collected in this manner.
  • Children and people of color have been disproportionately affected by the recession.
  • New York State’s performance, in most respects, reflects national trends.
  • The impact of the recession on poverty might have even been more drastic had it not been for the aid of a range of government benefits and stimulus programs.

This report reflects data about 2009. The 2010 picture might diverge somewhat based on three factors:

  1. on the positive side,  there have been some indications of a slightly improved economy over the course of this year,
  2. but on the negative side, some stimulus programs designed to provide a cushion for families at risk have been terminated or have not been renewed and
  3. some economists predict that changes in the poverty picture will lag behind even as the economy recovers.

The Numbers

Introduction: A word about measuring poverty and the Census

The Census data discussed here use the federal poverty level (FPL) as the measure of poverty.  There is a widespread view that the FPL no longer is – if it ever was – a valid measure. 2  Some conservative analysts 3 have argued that the FPL overstates the number of people truly living in poverty. However, the fact that, applying the FPL, a family of three is not poor if their income exceeds $18,310, anywhere in the country, suggests there are many people with income above the FPL whom we would consider poor.

Diana Pearce, of the University of Washington School of Social Work, asserts that the Census data understates the extent of poverty, first, because of the unrealistic nature of the federal poverty level, and also because it does not reach and therefore does not count homeless people or people who are “doubled-up” and living with other family members. 4

Poverty

The number of people in poverty in 2009 increased by 3.7 million people over the previous year, reaching a 51-year record of 43.6 million people.  The poverty rate (the percentage of people in poverty) rose from 13.2% to 14.3% in 2009, the highest rate since 1994. 

“Deep poverty” 

Another reflection of hard times is the sharp increase in “deep poverty,” households living at less than half of the federal poverty level.  An estimated 6.3% of Americans, well over 18 million people, live in deep poverty, an increase of more than 25% since 2000.  It would seem that this number is an indicator of “disconnected” households with little meaningful attachment to employment, government benefits or other means of support.

“Near poverty” 

While deep poverty provides an indicator of families in desperate straits, there are many people who have incomes as much as double the federal poverty line who nevertheless struggle to meet basic expenses, like food and housing.  Bear in mind that, for a family of three, 200% of the poverty level is only $36,620.  There are certainly many areas in this state, particularly in New York City and the suburban counties, where a three-person household with $36,000 in annual income would struggle mightily.  The Census data reveals that in 2009 more than 100 million Americans lived in these tenuous circumstances.

Child Poverty

A crucial indicator of economic well-being is the rate of poverty among children.  Recent research suggests that childhood poverty correlates closely with less favorable educational, vocational and income attainments in adulthood.  As is too often the case, the recently released Census data make clear that children are again disproportionately represented among the ranks of the poor.  The number of children living below the federal poverty level grew by nearly 2 million, to 20.7%, or more than one in five American children.  And while children make up roughly 25% of the overall population, they comprise over 35% of the poverty population. 

Minorities and the Poverty Data

As with children, minority communities experience a significantly higher rate of poverty than does the American population in general.  The poverty rate among blacks reached 25.8% in 2009 and the rate for Hispanics rose to 25.3%.  This compares to an overall national poverty rate of 14.3% and a rate of 9.4% for non-Hispanic whites.  The rates of deep poverty reflect comparable differences based on race and ethnicity, with the rate of deep poverty at 11.9% for blacks, 10.4% for Hispanics and 4.1% for whites.

Health Insurance

In 2009, the number and percentage of uninsured Americans reached their highest levels since the Census Bureau began collecting this data in 1987.  Nearly 50.7 million people were uninsured, representing 16.7% of the population. As might be anticipated in a period of high unemployment and underemployment, the decline in the number of people with insurance coverage was driven almost entirely by the decrease in private and employer-based coverage. Consistent with other poverty-related data, the percentage of uninsured minority group members far exceeds that of non-Hispanic whites.  Fully 32.4% of Hispanic Americans and 21% of African Americans do not have health insurance.  As will be discussed in the final section, the strikingly high percentage of uninsured Americans would be considerably higher were it not for increasing participation in the Medicaid program.

New York State

The data for New York State paints a picture that is comparable to that of other states.  The state’s poverty rate rose from 13.7% in 2008 to 14.2%, in 2009, with 2.69 million people living in poverty.  Deep poverty in New York rose to 6.4%, or 1.2 million people.  In New York, the poverty rate for children increased to 20%.  In addition, 14.8% of the population lacks health insurance.

The Impact of Government Benefits Programs

While low-income Americans and anti-poverty advocates often focus – appropriately – upon the inadequacies of public benefits programs, these programs have played a limited, but important, role in protecting against the most harmful impacts of the recession. 

Health coverage

In the past year, poverty has increased dramatically, as has the number of Americans without health coverage.  In contrast, the number and the percentage of people receiving Medicaid have reached their highest recorded levels, covering 47.8 million people, representing 15.7% of all Americans.  More than half of this increase was among children. 

Unemployment Insurance

Deb Weinstein, of the Coalition on Human Needs, writing about the new poverty data, remarked that “…The only modest surprise is that poverty did not rise even more steeply, thanks in large part to expansions in Unemployment Insurance and temporary subsidized jobs put in place by the Obama Administration and Congress.”  It is estimated that 3.3 million people were kept out of poverty by their receipt of Unemployment Benefits, including special benefit extensions implemented in recognition of the weakness of the job market.

Food Stamps

In 2009, 11.7 million households reported receiving food stamps (SNAP benefits) during the preceding 12 months.  This represented 10.3% of all American households, a nearly 20% increase over the preceding year. 5 In New York, 12.4% of households received food stamps, an increase of more than 18%.  The signing in 2009 of the American Recovery and Reinvestment Act (ARRA) resulted in an increase in food stamp benefits to low-income households.  It is estimated that if food stamps were counted as income, as many as 3.6 million Americans now counted as poor would have been lifted out of poverty. 6

Conclusion

There can be little doubt that, inadequate though they may be, public benefits, accompanied by stimulus and recovery assistance that increased or extended some government benefits, and also provided job subsidies and tax credits, cushioned the fall of many Americans in the Great Recession. As a cautionary note, to the extent these programs were established only on a “one-shot” or time-limited basis, their beneficial impact will fade if they are not extended or renewed.  

It is also essential to remember that, notwithstanding these benefits, millions have suffered and continue to suffer during this period.  Further, the weaknesses of the safety net and of the benefit programs discussed here have meant that the system failed to protect many needy Americans. 7

Sources and Resources

U.S. Census Bureau sources and links, starting with the September 16 report itself:

The Center on Budget and Policy Priorities, www.cbpp.org, issued a number of reports within a day of the release of the census data.  They include:

  • Arloc Sherman, Danilo Trisi, Robert Greenstein and Matt Broaddus, “Census Data Show Large Jump in Poverty and the Ranks of the Uninsured in 2009,” September 17, 2010.
  • Robert Greenstein, “Media Briefing: Examining the New 2009 Census Data on Poverty, Income, and Health Insurance Coverage,” September 16, 2010.
  • Robert Greenstein, “Statement: Robert Greenstein, Executive Director, on Census’ 2009 Poverty and Health Insurance Data,” September 16, 2010.

The Coalition on Human Needs website contains a number of entries concerning the new Census and poverty data, including:

  • Deborah Weinstein, “Across the Nation, the Recession Causes Steep Increase in Poverty; Nutrition Aid and Health Coverage Helps Children Withstand Dangers.” September 16, 2010.
  • “First Look: The Great Recession's Toll – A Record-Breaking Increase in the Poor and Uninsured,” September 16, 2010.
  • Deborah Weinstein, “A State of Emergency: We Need to Address Rising Poverty Now,” blog in the Huffington Post, September 16, 2010.
  • “Key Health Insurance Findings from 2009 Census,” Current Population Survey Release,” September 16, 2010.

Megan Curran, “Children in Poverty: State-by-State in 2009,” First Focus – Children in Poverty Reports, September 28, 2010.

Nichols, Austin, “Poverty in the United States,” The Urban Institute, September 16, 2010.

Footnotes

1   Note that this report is not based on the recently completed 2010 Census, but rather on the Census Bureau’s Current Population Survey Annual Social and Economic Supplements.  This report examines data from the survey of about 100,000 households in the United States that was completed in March 2010.

2   The FPL was established in the 1960s. Based on research indicating that families spent about one-third of their incomes on food, the official poverty level was set by multiplying food costs by three.  Since then, the same figures have been updated annually for inflation but have otherwise remained unchanged.  According to the National Center for Children in Poverty , food now comprises only one-seventh of an average family’s expenses, while the costs of housing, child care, health care, and transportation have grown disproportionately.

3     See, for example, Cox, Michael W. and Richard Alm (2000), Myths of Rich and Poor: Why We’re Better off than We Think, Basic Books.

4   Diana Pearce, director of the Center for Women’s Welfare at the University of Washington School of Social Work, developed the Self-Sufficiency Standard as an alternative measure of the income needs of American families, http://selfsufficiencystandard.org/.

5   The food stamp data reported here was not part of the Current Population Survey report released on September 16, 2010.  Rather, this information was set forth in a separate Census Bureau Report, “Food Stamp/Supplemental Nutrition Assistance Program (SNAP) Receipt in the Past 12 Months for Households by State: 2008 and 2009,” an American Community Survey Brief, ACSBR/09-8, written by Tracy Loveless, issued September 2010.

6   As an advocate who has focused upon the welfare system for many years, I feel compelled to remark upon the striking contrast between the welfare system on one hand and, for example, the food stamps program on the other, in terms of their responsiveness to the increase in need during the recession.  Between December 2007 and March 2010, the food stamp caseload increased by 51%.  In that same period, the number of TANF recipients rose by only 12%.  The reasons are many, but the numbers demonstrate the degree to which this program, with its low benefit levels and multiple administrative barriers, fails to serve needy Americans.  See Tim Casey, “TANF Caseload Fell Nationally And In Thirty Four States in the First Quarter Of 2010,” Legal Momentum, October 2010.

7   For a more thorough discussion of the weakness of the safety net, see “Leading Poverty Experts Assess New Census Data – Call for Bold, Comprehensive Plan to Combat Poverty and Unemployment,” The Institute for Policy Studies, September 16, 2010.  IPS has also been the lead publisher of a noteworthy report, “Battered by the Storm:  How the Safety Net is Failing Americans and How to Fix It,” December 2009.

 





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